Two individuals engage in the same two productive activities. In which of the following circumstances would neither individual have a comparative advantage in either activity?
What will be an ideal response?
One individual's opportunity costs are the same as the other individual's opportunity costs
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Dairy price supports create permanent, above-normal rates of return to dairy farming
a. True b. False
According to the Keynesian model, an increase in autonomous investment leads to
A) a more than proportional decrease in real Gross Domestic Product (GDP). B) a less than proportional decrease in real Gross Domestic Product (GDP). C) a proportional increase in real Gross Domestic Product (GDP). D) a reduction in taxes, autonomous government spending, and a fall in real Gross Domestic Product (GDP).
The long-run market supply curve in a competitive market will
a. always be horizontal. b. be the portion of the MC that lies above the minimum of AVC for the marginal firm. c. typically be more elastic than the short-run supply curve. d. be above the competitive firm's efficient scale.
If an individual’s income increases by $100, then their spending will increase by less than $100.
Answer the following statement true (T) or false (F)